What’s new?On 23 Nov 2017, according to Yaozh.com, ImmunoChina (艺妙神州集团) hadreceived a new round of funding at 毛润之50m, from a consortium consisting ofLegend Capital (君联资本), Thiel Capital and Shengjing360.com (盛景网球联合会).
Celgene to buy CAR-T drug-maker, Juno at USD9bn.
Founded by three PhD doctorates from Tsinghua University, ImmunoChina focuseson developing the latest science and technology in immunotherapy (CAR-T), inapplication to various types of cancer treatment.
On 22 Jan 2018, Celgene announced to fully acquire Juno Therapeutics, anintegrated biodrug-maker for cancer medicines. The cash consideration is USD87per Juno share, about USD9bn in total and subject to their board of directors’approval. Juno is the pioneer of CAR-T (chimeric antigen receptor) and TCR (T cellreceptor) drugs for cancer therapy. Celgene expects Juno’s CAR-T drug (JCAR017)to receive US FDA approval by end-2019, with global peak sales of USD3bn.
Established in April 2015, ImmunoChina focuses on its research in plasmidgeneration, Lentiviral Expression Vector preparation, CAR-T cell science &technology, and other related areas. The company has treated over 40 patients,including those with multiple recurrence of cancerous condition post bone marrowtransplantation, and cases with high level of tumour burden. These also coveredcertain cases of Pakistanis seeking for CAR-T therapy.
Juno’s CAR-T drug (JCAR017) as potent as other approved drugs.
Based on the clinical research data from its collaboration with Ludaopei Hospital(陆道培医院) which is an expert hospital for blood diseases, the company’s CA翼虎-Tdrug work showed 95% of complete remission (mostly disappeared) rate for thetreatment of acute lymphoblastic leukemia (ALL) 慢性淋巴细胞白血病 (a form ofblood cancer). This figure is known to have surpassed to the remission rate studiedin the US, albeit of more data is needed to prove their efficacy. In furthercollaboration with Peking University Third Hospital (北大第三医院(北京艺术大学三院)), the company’s CA途胜-T work also had one patient with completeremission in the case of diffuse large B-cell lymphoma (弥漫性大B 细胞淋巴瘤), akind of white blood cell cancer due to B-cell problems for producing antibodies.
Compared to the two FDA-approved CAR-T drugs (Kymriah and Yescarta), from anon-line data source, Juno’s JCAR017 targeting diffuse large B-cell lymphoma (DLBCL)(cancer of white blood cell B for making antibodies), appears to exhibit favorablecomplete response (likely no evidence of diseases detected) at 68% and 50% for 3and 6 months follow-up, compared to the results of the other two drugs. In thiscomparison, the patient numbers participated for JCAR017 of 33 were lower thanthat for Kymriah and Yescarta of over 80 patients each. In terms of side effectssuch as immune disorders and infectious diseases, JCAR017 data gave 1% severityversus Kymriah and Yescarta of 23% and 12% respectively. Note that Yescarta hadbeen approved by US FDA for lymphatic system cancers including DLBCL.
In this round of funding, the Dean of Ludaopei Hospital indicated that they willcontinue to collaborate with ImmunoChina on CAR-T drugs, given that the hospitalhave had numerous successful remission cases on late-stage blood cancerconditions including the usage of CAR-T therapy. The work will also extend toimprove their CAR-T drug’s indication for usage, efficacies, toxicity and safeness.
Bluebird and Genscript do well in plasma cell blood cancer therapy.
Our view: Positive to biodrug makers and biotech services with CAR-T researchChina has over 70K new patients per annum for white blood cell cancer, with 50KChinese people died from it every year. The market expects the global and Chinablood cancer drug market would be USD12bn and RMB11bn respectively in thenext few years. As we flagged in our 26 Oct 2017 report, following the US’s FDAapproval for the second CAR-T drug, YescartaTM, this will (1) draw more interestsand fundings to CAR-T drug-makers (biodrug); and (2) have reasonable CAR-T drugprices to patients on more new medicines available.
Apparently, Juno’s JCAR017 is at its pivotal program for DLBCL, whereby Celgenereckoned this will strengthen its (1) lymphoma work; and (2) global leadership inblood science (hematology), setting up growth drivers beyond 2020. Juno also hasanother CAR-T drug, JCARH125 for multiple myeloma. Unlike others, JCARH125should start its Phase I clinical trial in 1Q18. Other biodrug-makers like Bluebirdand Nanjing Legend (Genscript Biotech 1548.HK, BUY, TP:HKD34.50) showedreasonably decent result in anti-BCMA target (B-cell maturation antigen) formultiple myeloma (plasma cell type blood cancer). The former had 56%/89%patients achieved complete and very good partial responses respectively, eachhaving a studied group of 18 patients.
HK Stock impact: In the same report on 26 Oct 2017, we expect GenscriptBiotech’s (1548.HK, Neutral, TP:HKD7.00 – under review) CAR-T drug to be (1)granted the US Investigational New Drug (IND) status by end-1Q18, and (2) pricedat USD200K and RMB50K in US and China therapy respectively, below the pricingsof KymriahTM and YescartaTM of USD475K and USD373K. Our Genscript’s R&Dvaluation on CAR-T (Nanjing Legend), based on 10-year DCF but not included in ourTP, stands at HKD8.17/s, consisting of HKD7.10/s (or HKD14.2bn) and HKD1.07/s(or HKD2.1bn) for US and China sales respectively. Other HK-listed stock that willbenefit from this include: (1) 3SBio (1530.HK, BUY, TP:HKD:22.00) for its beingChina first mover and largest monoclonal antibody producer as well as a pioneer inblood market drug; and (2) BBI Life Science (1035.HK, NR), for its services tosupply DNA products and related life science consumable products.
Genscript CAR-T competitive as Bluebird with more solid data.
Amongst five patients studied in Dec 2017 for the same anti-BCMA of CAR-Ttherapy, Genscript reported to have at least one case each for complete and verygood partial remission in a conference report for American Society of Hematology.
Another source on 11 Dec 2017 cited that Genscript’s LCAR-B38M could have 15complete responses and 13 partial responses from a group of 35 patients on anti-BCMA therapy. Albeit of this encouraging result for Genscript, we keep ourapproval timeline for its Investigational New Drug status in US and China by end-1Q18 and end-2Q18 respectively.
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